No matter how it small, you must always put aside a little savings," are words *Corinne Peck heard quite frequently while growing up in rural Jamaica.

"That was the philosophy of my grandmother, a principled woman, who believed in saving," she said. "Grandma raised goats, burned coal for a living, and then she would 'throw her partner'. It was from those meagre earnings that she was able to send her two sons to school."

However, despite those early lessons, Corinne says she now finds it hard to save.

"It's not that I don't want to save. The truth is that, with all my responsibilities and the salary I am paid at the end of the month, I hardly have much left over to put anything away," she lamented.

Corinne, a single mother of two, who is employed as a project officer, said she makes a gross monthly salary of almost $150,000.

"After tax and my rent and car payments, which amount to almost half of my salary, I have school expenses, utilities, gas and supermarket bills. The balance leaves me with very little to take me through the month, much less to even think about any serious savings or investments," she outlined.

Corrine's story is similar to that of many Jamaicans, who say they know they should be saving, but find it difficult.

Important to inculcate thrift habit

Jamaica has a low savings to gross domestic product (GDP) ratio.

The World Bank indicates that the Jamaican Gross National Savings, as a percentage of its Gross Domestic Product (GDP) for 2016, was 7.8 per cent. For the Bahamas, the figure stood at 19.2 per cent; for St Kitts and Nevis, it was 26.5 per cent; and for China, 46.5 per cent.

The World Bank further estimated that the Jamaican GDP growth rate in 2016 was 1.4 per cent, while for Bahamas it was 0.2 per cent, St Kitts and Nevis, 2.2 per cent; and China, 6.7 per cent.

Rose Miller, grants manager at JN Foundation, noted that social pressures generally push persons to spend when they should be saving. However, she said that it is important for Jamaicans to inculcate the habit of thrift, as this is important not just for building individual wealth, but wealth for the country as a whole.

"No matter how much you make, at the end of the day, it is what you save that really matters. Besides, if one has no savings, there will be nothing to invest, thus opportunities for creating wealth through investments would not be possible," she stated.

Miller said unfortunately, many people discover far too late that they have not put aside enough funds to provide a cushion, in the event of an emergency, or for their retirement.

A survey, which was conducted as part of the 2014 Global Findex, found that there was some level of financial insecurity among Jamaicans, with many persons being unable to come up with money for an emergency.

The study indicated that when asked about the feasibility of quickly coming up with $28,000 for an emergency, 37 per cent of Jamaicans reported that it would be "not at all possible" or "not very possible".

Those who responded "somewhat possible," represented 22 per cent, while those who said it was "very possible," represented 37 per cent of those surveyed. The most commonly reported source of funds were from friends and family, followed by savings.

Miller explained that this is one of the reasons many Jamaicans are often forced to work beyond the normal retirement age, or struggle during their "golden years", or, in a worst case, become dependent on the benevolence others, especially their children, for their survival.

"The reality is that most Jamaicans do not establish adequate pension arrangements to ensure that they have a steady source of income when they retire," she said.

In fact, the Financial Services Commission (FSC) found that private pension plans, up to September 2017, only covered some 9.19 per cent of the persons employed in the Jamaican labour force.

How much should one save?

She further recommended that a benchmark to adopt is that persons in their 20s should aim to save 25 per cent of their overall gross salary. "That includes retirement account contributions, matching funds from your company, cash savings or money you have invested elsewhere," she explained.

Miller further advised that by age 30 one should have the equivalent of their annual salary saved.

"Therefore, if you earn $1 million a year, aim to have $1 million in savings when you hit 30," she outlined.

The Multiplier Effect

- By age 35: Have twice your annual salary saved.

- By age 40: Have three times your annual salary saved.

- By age 45: Have four times your annual salary saved.

- By age 50: Have five times your annual salary saved.

- By age 55: Have six times your annual salary saved.

- By age 60: Have seven times your annual salary saved.

- By age 65: Have eight times your annual salary saved.

"While this may sound intimidating today, if you were putting aside money to work for you, starting in your 20s, it's not as difficult as it may seem, due mainly to the power of compound interest," Miller stated.